Acxiom® Corporation (Nasdaq: ACXM), a global leader in
interactive marketing, today announced financial results for the
first quarter of fiscal year 2011 ended June 30, 2010. Acxiom will
hold a conference call at 10:00 a.m. CDT today to further discuss
this information. Interested parties are invited to listen to the
call, which will be broadcast via the Internet at www.acxiom.com.
The company will reference presentation slides that will be
available on the website prior to the call.
John Meyer, Acxiom’s chief executive officer and president,
said, “I am pleased with our performance this quarter. Despite
uneven economic recovery, we recorded solid year-over-year revenue
growth of approximately six percent. The majority of this increased
revenue was converted into operating income, which increased on an
annual basis by almost 77 percent. This increased operating
leverage reflects the actions we undertook over the past two years
to improve cost and performance efficiencies in our business.”
First Quarter 2011 Highlights:
- Revenue increased by 5.6%
in the current quarter ended June 30, 2010 to $270.4 million,
compared to $256.0 million for the quarter ended June 30,
2009.
- Income from operations of
$22.1 million in the current-year first quarter, up 76.7%, compared
to income from operations of $12.5 million in the first quarter of
the prior year.
- Earnings per diluted
share of $0.12 in the current quarter, compared to earnings per
diluted share of $0.05 in the first quarter of fiscal 2010.
- Operating cash flow of
$17.0 million compared to $16.2 million in the first quarter a year
ago.
- Free cash flow available to
equity of negative $6.3 million, compared to negative $13.2
million in the first quarter a year ago. Free cash flow available
to equity is a non-GAAP financial measure; a reconciliation to the
comparable GAAP measure, operating cash flow, is attached to this
news release.
Operational Highlights:
- Information Services:
Revenue for the quarter ended June 30, 2010 was $210.7 million, up
5.7%, compared to $199.3 million for the quarter ended June 30,
2009. Income from operations for the current first quarter was
$20.9 million, up 31.8% compared to $15.8 million in the prior-year
first quarter.
- Information Products:
Revenue for the quarter increased 5.4% to $59.7 million, compared
with $56.7 million in the first quarter a year ago. Income from
operations for the quarter was $1.1 million, compared to loss from
operations of $3.0 million in the first quarter of the previous
year.
- Brazil Acquisition: The
company announced a strategic expansion into the South American
market with the signing of a definitive agreement for the
acquisition of a controlling interest in GoDigital, a data quality
and precision marketing company in Sao Paulo and Porto Alegre,
Brazil. Founded in 2000, GoDigital has two unique, proprietary
products – GoQuality, which offers total data quality management,
and Claridata, a web-based suite that offers multichannel marketing
campaign management and geo-analytical indicators for targeted
marketing and campaign analysis.
Web Link to Financials
You may link to http://www.acxiom.com/FY11_Q1_Financials for the
detailed financial information we typically attach to our earnings
releases.
About Acxiom
Acxiom is a recognized leader in marketing technology and
services that enable marketers to successfully manage audiences,
personalize consumer experiences and create profitable customer
relationships. Our superior industry-focused, consultative approach
combines consumer data and analytics, databases, data integration
and consulting solutions for personalized, multichannel marketing
strategies. Acxiom leverages over 40 years of experience of data
management to deliver high-performance, highly secure, reliable
information management services. Founded in 1969, Acxiom is
headquartered in Little Rock, Arkansas, USA, and serves clients
around the world from locations in the United States, Europe,
Asia-Pacific, South America and the Middle East. For more
information about Acxiom, visit Acxiom.com.
Forward Looking Statements
This release and today’s conference call may contain
forward-looking statements including, without limitation,
statements regarding an improvement in the economic outlook, and a
continued return to our historical seasonal revenue and operating
income patterns. Such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially. The following are factors, among others, that
could cause actual results to differ materially from these
forward-looking statements: the possibility that certain contracts
may not generate the anticipated revenue or profitability or may
not be closed within the anticipated time frames; the possibility
that significant customers may experience extreme, severe economic
difficulty or otherwise reduce the amount of business they do with
us; the possibility that we will not successfully complete customer
contract requirements on time or meet the service levels specified
in the contracts, which may result in contract penalties or lost
revenue; the possibility that we may not be able to attract, retain
or motivate qualified technical, sales and leadership associates,
or that we may lose key associates to other organizations; the
possibility that we will not be able to continue to receive credit
upon satisfactory terms and conditions; the possibility that
negative changes in economic conditions in general or other
conditions might lead to a reduction in demand for our products and
services; the possibility that there will be changes in consumer or
business information industries and markets that negatively impact
the company; the possibility that the historical seasonality of our
business may change; the possibility that we will not be able to
achieve cost reductions and avoid unanticipated costs; the
possibility that the fair value of certain of our assets may not be
equal to the carrying value of those assets now or in future time
periods; the possibility that changes in accounting pronouncements
may occur and may impact these forward-looking statements; the
possibility that we may encounter difficulties when entering new
markets or industries; and other risks and uncertainties, including
those detailed from time to time in our periodic reports filed with
the Securities and Exchange Commission, including our current
reports on Form 8-K, quarterly reports on Form 10-Q and annual
report on Form 10-K, particularly the discussion under the caption
“Item 1A, RISK FACTORS” in our Annual Report on Form 10-K for the
year ended March 31, 2010, which was filed with the Securities and
Exchange Commission on May 26, 2010.
With respect to the provision of products or services outside
our primary base of operations in the United States, all of the
above factors apply, along with the difficulty of doing business in
numerous sovereign jurisdictions due to differences in scale,
competition, culture, laws and regulations.
We undertake no obligation to update the information contained
in this press release or any other forward-looking statement.
Acxiom is a registered trademark of Acxiom Corporation.
ACXIOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in
thousands, except earnings per share) For the Three
Months Ended June 30, $ % 2010 2009 Variance Variance
Revenue: Services 210,656 199,326 11,330 5.7 % Products 59,739
56,655 3,084 5.4 % Total revenue 270,395 255,981
14,414 5.6 % Operating costs and expenses: Cost of revenue
Services 164,650 159,576 (5,074 ) (3.2 %) Products 45,771
45,919 148 0.3 % Total cost of revenue 210,421 205,495
(4,926 ) (2.4 %) Services gross margin 21.8 % 19.9 %
Products gross margin 23.4 % 18.9 % Total gross margin 22.2 % 19.7
% Selling, general and administrative 37,955 37,643 (312 )
(0.8 %) Gains, losses and other items, net (57 ) 347 404
116.4 % Total operating costs and expenses 248,319
243,485 (4,834 ) (2.0 %) Income from operations
22,076 12,496 9,580 76.7 % Other income
(expense): Interest expense (5,898 ) (5,505 ) (393 ) (7.1 %) Other,
net (451 ) (118 ) (333 ) (282.2 %) Total other income
(expense) (6,349 ) (5,623 ) (726 ) (12.9 %) Earnings before
income taxes 15,727 6,873 8,854 128.8 % Income taxes 6,291
2,679 (3,612 ) (134.8 %) Net earnings 9,436
4,194 5,242 125.0 % Less: Net earnings (loss) attributable
to noncontrolling interest (369 ) - (369 ) - Net
earnings attributable to Acxiom 9,805 4,194 5,611
133.8 % Earnings per share: Basic 0.12 0.05
0.07 140.0 % Diluted 0.12 0.05 0.07
140.0 % Earnings per share attributable to Acxiom
stockholders: Basic 0.12 0.05 0.07 140.0 %
Diluted 0.12 0.05 0.07 140.0 %
ACXIOM CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE (Unaudited) (In thousands, except
earnings per share) For the Three Months Ended
June 30, June 30, 2010 2009 Basic earnings per share:
Numerator - net earnings 9,436 4,194 Denominator -
weighted-average shares outstanding 79,741 78,667 Basic
earnings per share 0.12 0.05 Diluted earnings per share:
Numerator - net earnings 9,436 4,194 Denominator -
weighted-average shares outstanding 79,741 78,667 Dilutive
effect of common stock options, warrants and restricted stock 1,715
345 81,456 79,012 Diluted earnings per share 0.12
0.05 Basic earnings per share
attributable to Acxiom stockholders: Numerator - net
earnings attributable to Acxiom 9,805 4,194 Denominator -
weighted-average shares outstanding 79,741 78,667 Basic
earnings per share attributable to Acxiom stockholders 0.12 0.05
Diluted earnings per share attributable to Acxiom
stockholders: Numerator - net earnings attributable to
Acxiom 9,805 4,194 Denominator - weighted-average shares
outstanding 79,741 78,667 Dilutive effect of common stock
options, warrants, and restricted stock 1,715 345 81,456
79,012 Diluted earnings per share attributable to Acxiom
stockholders 0.12 0.05 ACXIOM CORPORATION AND
SUBSIDIARIES RESULTS BY SEGMENT (Unaudited) (Dollars in thousands)
For the Three Months Ended June 30, June 30,
Revenue: 2010 2009 Information services 210,656
199,326 Information products 59,739 56,655
Total revenue 270,395 255,981
Income
from operations: Information services 20,879 15,838
Information products 1,140 (2,995 ) Other 57 (347 )
Total income from operations 22,076 12,496
Margin: Information services 9.9 % 7.9 % Information
products 1.9 % -5.3 % Total margin 8.2 % 4.9 %
ACXIOM CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)
June 30, March 31, $ % 2010 2010 Variance Variance
Assets
Current assets: Cash and cash equivalents 218,457 224,104 (5,647 )
(2.5 %) Trade accounts receivable, net 183,644 168,522 15,122 9.0 %
Deferred income taxes 11,765 11,874 (109 ) (0.9 %) Other current
assets 52,799 54,205 (1,406 ) (2.6 %) Total
current assets 466,665 458,705 7,960 1.7 %
Property and equipment 840,179 824,084 16,095 2.0 % Less -
accumulated depreciation and amortization 599,839 587,245
12,594 2.1 % Property and equipment, net 240,340
236,839 3,501 1.5 % Software, net of
accumulated amortization 34,771 38,845 (4,074 ) (10.5 %) Goodwill
464,374 470,261 (5,887 ) (1.3 %) Purchased software licenses, net
of accumulated amortization 49,005 51,356 (2,351 ) (4.6 %) Deferred
costs, net 72,983 68,914 4,069 5.9 % Data acquisition costs 20,945
21,931 (986 ) (4.5 %) Other assets, net 14,944 16,569
(1,625 ) (9.8 %) 1,364,027 1,363,420 607 0.0 %
Liabilities and Stockholders' Equity
Current liabilities: Current installments of long-term debt 42,169
42,106 63 0.1 % Trade accounts payable 40,041 42,774 (2,733 ) (6.4
%) Accrued payroll and related expenses 27,664 36,517 (8,853 )
(24.2 %) Other accrued expenses 74,826 75,632 (806 ) (1.1 %)
Deferred revenue 56,335 55,567 768 1.4 % Income taxes 3,965
2,460 1,505 61.2 % Total current liabilities 245,000
255,056 (10,056 ) (3.9 %) Long-term debt
459,833 458,629 1,204 0.3 % Deferred income taxes 63,595
61,284 2,311 3.8 % Other liabilities 9,915 9,954 (39 ) (0.4
%) Stockholders' equity: Common stock 11,715 11,662 53 0.5 %
Additional paid-in capital 821,649 814,929 6,720 0.8 % Retained
earnings 492,048 482,243 9,805 2.0 % Accumulated other
comprehensive income (loss) (4,855 ) 4,167 (9,022 ) (216.5 %)
Treasury stock, at cost (738,601 ) (738,601 ) 0 0.0 % Total Acxiom
stockholders' equity 581,956 574,400 7,556 1.3 % Noncontrolling
interest 3,728 4,097 (369 ) (9.0 %) Total
equity 585,684 578,497 7,187 1.2 % 1,364,027
1,363,420 607 0.0 % ACXIOM CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Dollars in thousands) For the Three Months
Ended June 30, 2010 2009 Cash flows from operating
activities: Net earnings 9,436 4,194 Non-cash operating activities:
Depreciation and amortization 35,986 40,595 Deferred income taxes
1,435 2,496 Non-cash stock compensation expense 2,972 2,388 Changes
in operating assets and liabilities: Accounts receivable (16,836 )
(4,335 ) Other assets (1,467 ) 4,651 Deferred costs (9,981 ) (906 )
Accounts payable and other liabilities (7,121 ) (32,017 ) Deferred
revenue 2,564 (900 ) Net cash provided by operating
activities 16,988 16,166 Cash flows from investing
activities: Capitalized software (1,226 ) (2,384 ) Capital
expenditures (8,752 ) (7,431 ) Data acquisition costs (4,326 )
(5,777 ) Payment received from investments 175 - Net cash paid in
acquisitions (1,978 ) - Net cash used by investing
activities (16,107 ) (15,592 ) Cash flows from financing
activities: Payments of debt (8,964 ) (13,724 ) Sale of common
stock 3,801 2,427 Acquisition of treasury stock - (307 ) Net
cash used by financing activities (5,163 ) (11,604 ) Effect of
exchange rate changes on cash (1,365 ) 1,534 Net
change in cash and cash equivalents (5,647 ) (9,496 ) Cash and cash
equivalents at beginning of period 224,104 177,166
Cash and cash equivalents at end of period 218,457 167,670
Supplemental cash flow information: Cash paid
(received) during the period for: Interest 5,780 5,258 Income taxes
3,358 (5,052 ) Payments on capital leases and installment payment
arrangements 5,968 7,794 Payments on software and data license
liabilities 893 3,878 Other debt payments, excluding line of credit
2,103 2,052 Noncash investing and financing activities:
Acquisition of property and
equipment under capital lease and installment payment
arrangements
10,268 3,823
ACXIOM CORPORATION AND SUBSIDIARIES CALCULATION OF FREE CASH FLOW
AVAILABLE TO EQUITY AND RECONCILIATION TO OPERATING CASH FLOW
(Unaudited) (Dollars in thousands)
06/30/09
09/30/09 12/31/09 03/31/10 FY2010 06/30/10
Net cash provided by operating activities 16,166 60,703
74,509 87,904 239,282 16,988 Plus: Sale of assets - - 1,058
- 1,058 - Less: Capitalized software (2,384 ) (2,431 )
(1,846 ) (1,596 ) (8,257 ) (1,226 ) Capital expenditures (7,431 )
(14,462 ) (9,479 ) (26,536 ) (57,908 ) (8,752 ) Data acquisition
costs (5,777 ) (3,004 ) (5,450 ) (4,577 ) (18,808 ) (4,326 )
Payments on capital leases and installment payment arrangements
(7,794 ) (7,504 ) (7,309 ) (7,090 ) (29,697 ) (5,968 ) Payments on
software and data license liabilities (3,878 ) (1,840 ) (416 )
(1,392 ) (7,526 ) (893 ) Other required debt payments (2,052 )
(2,058 ) (2,091 ) (3,597 ) (9,798 )
(2,103 ) Total (13,150 ) 29,404 48,976
43,116 108,346 (6,280 )
ACXIOM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (Dollars in thousands, except earnings per
share)
Q1 FY10 to Q1 FY11 06/30/09 09/30/09 12/31/09
03/31/10 FY2010 06/30/10 % $ Revenue: Services
199,326 210,213 218,340 221,553 849,432 210,656 5.7 % 11,330
Products 56,655 60,892 65,467
66,789 249,803 59,739 5.4 %
3,084 Total revenue 255,981 271,105 283,807 288,342
1,099,235 270,395 5.6 % 14,414 Operating costs and expenses:
Cost of revenue Services 159,576 165,792 163,206 166,085 654,659
164,650 3.2 % 5,074 Products 45,919 46,129
46,727 45,835 184,610
45,771 -0.3 % (148 ) Total cost of revenue 205,495
211,921 209,933 211,920 839,269 210,421 2.4 % 4,926
Selling, general and administrative 37,643 37,964 43,477 43,013
162,097 37,955 0.8 % 312 Gains, losses and other items, net 347
(27 ) 538 (1,802 ) (944 )
(57 ) -116.4 % (404 ) Total operating costs and
expenses 243,485 249,858 253,948 253,131 1,000,422 248,319 2.0 %
4,834 Income from operations 12,496 21,247 29,859 35,211
98,813 22,076 76.7 % 9,580
% Margin 4.9 %
7.8 % 10.5 % 12.2 %
9.0 % 8.2 % Other income (expense)
Interest expense (5,505 ) (5,423 ) (5,687 ) (5,865 ) (22,480 )
(5,898 ) 7.1 % (393 ) Other, net (118 ) 223
198 122 425 (451 ) 282.2 %
(333 ) Total other income (expense) (5,623 ) (5,200 ) (5,489
) (5,743 ) (22,055 ) (6,349 ) 12.9 % (726 ) Earnings before
income taxes 6,873 16,047 24,370 29,468 76,758 15,727 128.8 % 8,854
Income taxes 2,679 6,602 10,212
13,106 32,599 6,291 134.8 %
3,612 Net earnings 4,194 9,445 14,158 16,362
44,159 9,436 125.0 % 5,242
Less: Net earnings (loss)
attributable to noncontrolling interest
- - (104 ) (286 ) (390 )
(369 ) - (369 ) Net earnings
attributable to Acxiom 4,194 9,445
14,262 16,648 44,549 9,805
133.8 % 5,611
Diluted earnings per share
attributable to Acxiom shareholders
0.05 0.12 0.18 0.21
0.56 0.12 140.0 % 0.07
ACXIOM CORPORATION AND SUBSIDIARIES RESULTS BY SEGMENT
(Unaudited) (Dollars in thousands)
Q1 FY10 to Q1 FY11 06/30/09
09/30/09 12/31/09 03/31/10 FY2010
06/30/10 % $ Revenue: Services 199,326 210,213
218,340 221,553 849,432 210,656 5.7 % 11,330 Products 56,655
60,892 65,467 66,789
249,803 59,739 5.4 % 3,084 Total
revenue 255,981 271,105 283,807
288,342 1,099,235 270,395 5.6 %
14,414 Income from operations: Services 15,838
19,971 27,565 27,639 91,013 20,879 31.8 % 5,041 Products (2,995 )
1,249 2,832 5,770 6,856 1,140 -138.1 % 4,135 Other (347 ) 27
(538 ) 1,802 944 57
-116.4 % 404 Total income from operations
12,496 21,247 29,859
35,211 98,813 22,076 76.7 %
9,580 Margin: Services 7.9 % 9.5 % 12.6 % 12.5 % 10.7
% 9.9 % Products -5.3 % 2.1 % 4.3 % 8.6 % 2.7 % 1.9 % Total
4.9 % 7.8 % 10.5 % 12.2 % 9.0 % 8.2 %
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